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On-site estate agency offices

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Examples of an on-site office are an office in a display home, shopping centre, office block or industrial estate.

Guidelines

1. Introduction

These guidelines set out the criteria that we and the Business Licensing Authority (BLA) will use to determine when an office or place where estate agency business is conducted is an on-site office. An on-site office is not a branch office for the purposes of section 30 of the Estate Agent Act 1980 (the Act).

2. Defining an ‘on-site office’

An ‘on-site office’ is an office or place where estate agents and agents’ representatives conduct estate agency business, and that is:

owned by the landlord or vendor who has engaged the estate agent; and

used by the agent and their staff to only undertake estate agency business on behalf of that vendor or landlord.

Examples of on-site offices include:

the home of a vendor or a room in a display house in a residential development where a salesperson negotiates a real estate transaction with a vendor or a prospective purchaser or where documentation is signed

certain offices or places in shopping centres, other commercial buildings, industrial estates and residential or rural premises where a property manager undertakes a real estate transaction on behalf of a landlord, or tenants of that landlord.

An on-site office differs from a branch office of an estate agency primarily because the business conducted at a branch office is conducted on behalf of more than one vendor or landlord. Also, it is not necessary for the premises where the branch operates to be leased from the principal on whose behalf the agency is acting.

3. Defining a branch office under the Act

The Act applies to principal offices and branch offices. Section 4 defines a branch office as an office, other than a principal office, where the business of a licensed estate agent is conducted.

The business of a licensed estate agent encompasses all activities involved with the buying, selling and letting of real estate or business and the collection of rent. It also includes any negotiations on behalf of an owner (landlord or vendor) or any other person. This means that any office or place, other than a principal office, where a real estate transaction is managed, negotiated, documented or otherwise undertaken is a branch office of an estate agency.

However, in practice not all offices and places where estate agency business is conducted are branch offices for the purposes of the management requirements of the Act.

4. Management requirements for branch offices

Section 30 of the Act provides for a branch office to be managed by an estate agent or an approved agent’s representative, that is an agent’s representative with an unexpired approval to manage a branch office that was granted before 1 February 1995.

In contrast, a principal office must be managed by an estate agent. The manager of an estate agency office, regardless of whether it is a principal or branch office, is responsible for the day-to-day operations of that office and is only permitted to manage one estate agency office at a time.

Under section 29B of the Act, an estate agency business must be controlled and supervised by an estate agent from the principal office. That estate agent is also responsible for properly controlling and supervising the management of any branch offices of the agency.

It is not necessary for an on-site office to meet the management requirements of section 30 of the Act.

5. Criteria for assessing on-site offices

When administering and enforcing the provisions of the Act, we and the BLA will use the following criteria as a guide to whether or not an office or place of business is an on-site office. The estate agent in control of the agency should also take these matters into consideration when establishing and proposing the operational arrangements for such places.

Where all of the following criteria are met, an office or place is considered to be an on-site office and not a branch office for the purposes of the section 30 of the Act.

5.1 The office or place of business where the estate agency business is being conducted is located within the vendor’s or the landlord’s property.

5.2 The estate agency business being conducted at that office or place:

a) is being conducted on behalf of the vendor or the landlord who engaged the agent; and

(b) is concerned with the property where the office or place is located or with other properties managed by the agent on behalf of that vendor or that landlord.

5.3 There are adequate management arrangements at that office or place and the estate agency business being conducted there is being conducted by employee-estate agents or agents’ representatives.

5.4 The estate agent in control of the agency is controlling and supervising the business and the staff conducting business at that office or place.

5.5 Any trust moneys received at that office or place are deposited in a trust account centrally managed from the principal office of the agency.

5.6 The estate agency has a separate office as its principal office for the purposes of the Act.

If one or more of these criteria are not met, then we and the BLA will consider the office or place to be a branch office, and not an on-site office, for the purposes of the Act.

6. Responsibilities of an estate agent for an on-site office

An estate agent in control of the agency for an on-site office must:

properly control and supervise the management of that office

establish and monitor procedures to ensure that the estate agency business undertaken by salespeople and property managers at that office is in accordance with the law and good estate agency practice

ensure that all employees at that office comply with the relevant laws.

The estate agent in control must ensure that their procedures and business systems enable them at all time to meet these responsibilities and to control trust moneys relating to the estate agency business conducted at the on-site office.

7. Practical effect of the guidelines on the day-to-day operation of an on-site office

These guidelines mean that an on-site office:

may be managed by an agent’s representative

is not required to be:

recorded on the public register maintained by the BLA under section 33 of the Act

approved or exempt by the BLA or Consumer Affairs Victoria.

8. How to use these guidelines

The estate agent in control of an agency should use these guidelines to decide when an office or place is an on-site office. If the office is considered to be an on-site office then appropriate arrangements should be made for the management, control and supervision of any business conducted or any staff working at that office or place.

We will monitor the estate agency business conducted at on-site offices to ensure compliance with these guidelines and the Act. An estate agent in control of an agency who decides that an office or place is an on-site office must keep documentary evidence that it meets all the criteria set out in section 5 above, for review by our officers.

9. Consequences for failure to comply with these guidelines

If an estate agent in control of an agency operates an office as though it is an on-site office and the conditions set out in section 5 are not met, we will consider it a breach and the estate agent may be in breach of the Act.